SUBSCRIBE
Enter your Name and Email address to get
the newsletter delivered to your inbox.
Please include name of person that directed you to my online newsletter so I can thank them personally.
David P. McCabe,
WMCP®, ChFC®, CLU®
Financial Planner
Nathaniel D. High, RICP®
Financial Planner
Nicholas J. Over, CFP®
Financial Planner
Sara E. Martin
Operations Manager
Jennifer A. McCabe
Client Service Specialist
jennifer.mccabe@prudential.com
Centuria Financial Group
2333 Baltimore Blvd Suite B
Finksburg, MD 21048
Phone: 443-952-7232
January/February 2024
Irrevocable Trust: You Can't Take It Back
An irrevocable trust is a trust the creator (or “grantor”) cannot change or revoke. There are two main types of irrevocable trusts. A living trust is established and funded during your lifetime. A testamentary trust is created after your death and funded from your estate according to the terms of your will. Your legal professional can draft the necessary trust documents.
Why Create an Irrevocable Trust?
Typical reasons for setting up an irrevocable trust are for wealthy individuals to minimize estate taxes; to “spend down” assets to become eligible for government programs; or to protect assets from creditors. An irrevocable trust can also help avoid probate and allow you to make arrangements in advance if you become incapacitated.How the Trust Is Created
As the grantor, you establish the trust, designate someone to act as trustee, and name the beneficiary (or beneficiaries) who will eventually receive the trust assets. Once you have transferred assets into the trust, you surrender your ownership rights and hand over control to the trustee, who will oversee the trust and the distribution of its assets. Assets held in the trust can include cash, stocks, bonds, real estate, a closely held business, life insurance policies, and other property and investments.The Downside of Irrevocable Trusts
Once the assets are transferred, the trust generally cannot be changed or terminated. This means you cannot remove or change the beneficiaries named in the trust, even if you no longer want a beneficiary to receive the assets. You also cannot regain control of any trust assets should you need those assets in the future.A New Ruling
Previously, assets in an irrevocable trust received a step up in basis to their value on the date of the decedent’s death, eliminating capital gains tax. However, IRS Revenue Ruling 2023-2 states that completed gifts to grantor trusts are not eligible for a step-up in basis.Your attorney can discuss how this ruling affects your estate plan.
1052406-00003-00
CONTACT US
Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.
David P. McCabe, Nathaniel D. High, and Nicholas J. Over are Financial Planners with, and offer securities and investment advisory service through LPL Enterprise (LPLE), a Registered Investment Advisor, Member FINRA/SIPC, and an affiliate of LPL Financial.
LPLE and LPL Financial are not affiliated with Centuria Financial Group.
This newsletter is general educational information provided by a Prudential Financial Professional and is not intended to market or sell any specific products and services, but rather provide general information about the subject matter covered only.
Centuria Financial Group and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.
The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.